Today’s a big day for Apple. The tech giant announced its third-quarter earnings, fulfilling industry expectations about low sales for the Apple Watch. Apple reported third-quarter revenue of $49.6 billion, up 33% over the same period last year.
Notably, the company did not say how many Apple Watches it sold. The smartwatches were folded into a category called “Other,” which also includes the iPod, Beats headphones, and Apple TV. “Other” sales generated $2.64 billion, though the company emphasized it sold more Apple Watches in the product’s first nine weeks than in the iPad’s first nine weeks. In Q1 of 2015, before the Apple Watch was released, the segment was resposible for approximately $1.7 billion of sales. It is a safe bet to say thw Watch is responsible for much of that nearly $1 billion differential. Apple CFO Luca Maestri told the Associated Press that “We beat our own expectations.” But still, no firm numbers.
Apple has faced investor disapproval due to the relatively slow adoption of the Apple Watch; despite a heavy marketing push, sales have been lagging. Although Apple Music has shown more viability in the mainstream marketplace, it faces strong competition from players like Spotify, Pandora, and Rdio.
One good piece of news for Apple was the number of iPhones sold in Q2: Despite Samsung and Google’s best efforts, Apple moved 47.5 million iPhones and 10.9 million iPads.
However, Apple received some unexpected news this morning related to those much-hyped music services. The Federal Trade Commission (FTC) has begun an investigation of Apple and the iTunes store, motivated by the 30% fee charged by Apple to services like Spotify, Rdio, and Tidal that sign users up through the iTunes store. If the FTC takes action against Apple, it could be a huge boon to rivals like Spotify and Tidal.
Apple’s stock was down 7% in after-hours trading.